It was November 20, 1974 and the US Department of Justice files an antitrust suit charging anticompetitive behavior, and seeking breakup of Bell System. A judge in Philadelphia by the name of Harold H. Greene took up the case of whether the United States government had legally granted the Bell system monopoly status. The judge decided that the Bell system was illegal and therefore had to be broken up. But how, and what were to be the new rules? The judge spent the rest of his professional life dealing with the can of worms that he created. He would rule over how the Bell System would look in the future, right down to who would got to paint their vans in the old telephone colors and how a microwave tower in the middle of nowhere would be divided to handle telephone traffic. Mr, Greene did not have any technical background of telephone business or how it even functioned from a basic perspective.
A 1983 sign hung in many Bell System facilities said:
“There are two giant entities at work in our country, and they both have an amazing influence on our daily lives . . . one has given us radar, sonar, stereo, teletype, the transistor, hearing aids, artificial larynxes, talking movies, and the telephone. The other has given us the Civil War, the Spanish American War, the First World War, the Second World War, the Korean War, the Vietnam War, double-digit inflation, double digit unemployment, the Great Depression, the gasoline crisis, and the Watergate fiasco. Guess which one is now trying to tell the other one how to run its business?“
In many ways this crystallized the feeling of the executives of AT&T and their lawyers. During this time I was dating the daughter of one of the lead patent attorneys. As a very curious technology geek living near Princeton, New Jersey I got to see what became known as “The Divestiture” in a way few could have at the time.
Many technology observers, consultants and lawyers will of course study and quote the Microsoft anti-trust case as a basis of study, but they are tragically wrong for many reasons. Unfortunately Google and many in the technology world have already taken this approach. They also have fallen into the very short term thinking, although very popular today of seeing things through the ‘Political Lens”. History has shown and will show this is always a feeble way to understand the world and most certainly business.
The short answer is as a business person or just a consumer of products and services of massive technology companies, studying just some of the points of the AT&T anti-trust and resulting Divestiture is vital.
If you are an entrepreneur or in a venture capital firm I can say the opportunities ahead are absolutely astonishing. Thus I will explore some of how AT&T anti-trust applies far more for what is ahead then Microsoft and how this will form opportunities, perhaps creating 100s of smaller companies you could run or be a part of. This will be available in the Member-Only area below.
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